Ghanaian President Nana Akufo-Addo and his ministers have cut their salaries by 30 percent under measures to reduce spending as the country struggles with higher fuel costs from the Ukraine crisis and stalled progress on a new tax, the government said on Thursday.
Finance Minister Ken Ofori-Atta announced that foreign travel by government appointees, except for critical missions, and the purchase of imported vehicles had been suspended with immediate effect.
He said the government hoped to save around $400 million through the measures.
Global fuel prices have hit all-time highs because of the Russia-Ukraine war, driving up costs of living and transport in a way that has hit West African countries like Ghana hard.
Ghana’s government is also struggling to raise domestic revenue as gridlock in parliament since last year has stalled the passage of a controversial 1.75-percent E-Levy tax aimed at bringing in additional funds.
“It is important to stress, right from the onset, that the difficulties we are facing in Ghana are not peculiar to Ghana,” the minister’s statement said.
“Governments in both developed and developing countries are busily coming out with various prescriptions to bring their economies back on track, after the devastating impact of Covid-19 which distorted global supply chains, and the ongoing Russia-Ukraine war.”
Other measures include a 50-percent cut in fuel coupon allocations for all political appointees and heads of government institutions.
The main opposition National Democratic Congress (NDC) said the decisions were inadequate.
“Our immediate response to the Minister of Finance is to state emphatically and unequivocally that he has lost touch with reality, he is not in-tuned with the state of the Ghanaian economy,” the Minority Leader Haruna Iddrisu told reporters in parliament.
Recent data published by the Bank of Ghana indicates that the country’s debt to GDP was 80.1 percent at the end of December 2021.
Neighbouring Nigeria, Africa’s largest economy, is also struggling with the twin problems of an unstable power supply and the doubling of the cost of diesel that many businesses use to fuel generators which keep the power going during blackouts.
Mexico’s economy grew by five percent in 2021, but Latin America’s second biggest economy headed into technical recession at the end of the year after contracting for a second-straight quarter, preliminary official data showed Monday.
Economic activity slowed by 0.4 and 0.1 percent in the last two quarters of 2021, compared to the previous three-month periods, according to the data from national statistics institute INEGI.
Analysts Capital Economics said in a statement to clients that the fourth quarter data “confirmed that the economy slipped into a recession over the second half of 2021, and we think growth this year will be weaker than most expect.”
Central bank analysts expect the economy to grow 2.7 percent in 2022.
The Mexican economy had shrunk by 8.4 percent in 2020 as the coronavirus pandemic caused mass shutdowns — with 4.9 million Covid-19 cases and more than 300,000 deaths in the nation of 129 million.
INEGI said industrial activity, which represents close to a third of GDP, grew by 6.8 percent last year.
Services, worth 60 percent of GDP, rose by 4.2 percent while so-called primary activities — such as farming, fisheries and natural resources extraction — grew just 2.7 percent.
Rather than direct aid to businesses, the government of President Andres Manuel Lopez Obrador has concentrated its pandemic recovery efforts on social programs and investment in public works, such as the new airport in Mexico City and an oil refinery in the southeast.
Supermarket shelves are bare and restaurants can’t serve meals, but Sri Lanka’s economic crisis is a bonanza for used car dealers, with vehicle shortages pushing prices higher than a house in a nice area.
The island nation of 22 million is on the brink of bankruptcy, inflation is red hot and the government has barred a range of “non-essential” imports to save dollars needed to buy food, medicine and fuel.
In the car market, this two-year ban has kept factory-fresh automobiles off local roads, forcing desperate buyers to pay some of the world’s highest prices for beaten-up compacts and no-frills family sedans.
Anthony Fernando spent a recent weekend coursing through sales lots in the Colombo outskirts on behalf of his daughter, who has tried to find an affordable set of wheels for nearly a year.
“She was thinking that prices will come down,” the 63-year-old told AFP, but now she is “paying for procrastinating”.
Prices have gone “beyond the reach of a common person”, he said.
A five-year-old Toyota Land Cruiser was on offer online for an eye-watering 62.5 million rupees ($312,500) — triple the pre-ban rate, and enough to buy a house in a middle-class Colombo neighbourhood or a new luxury apartment in the city centre.
A decade-old Fiat five-seater with a busted engine that might be stripped for parts elsewhere was listed at $8,250 — more than twice Sri Lanka’s average yearly income.
“A car and a house are symbols of success,” said a grinning Sarath Yapa Bandara, the owner of one of the capital’s biggest dealerships.
“That is why most people are willing to buy even at these high prices.”
– ‘Out of this world’ –
Car ownership remains a virtual necessity in the traffic-snarled streets of Colombo, where a ramshackle bus and rail network was already struggling with overcrowding.
The number of taxis has also fallen sharply, with drivers selling their cabs to cash in on the dizzying prices, and those still working charging double their old fares or more.
“You must have your own car,” said Udaya Hegoda Arachchi, another buyer preparing to bite the bullet at a dealership.
“We can’t expect prices to come down anytime soon, given the economic situation in the country,” he told AFP.
Covid has sent Sri Lanka into a tailspin, drying up all-important earnings from tourism and foreign remittances.
In March 2020 the government brought in a wide-ranging import ban — including for new cars — to stop foreign currency from leaving the country.
But the policy has not been able to staunch the outflow of dollars, and has instead left the nation struggling to source critical goods.
Food retailers have rationed rice, restaurants have shuttered because they cannot find cooking gas, and cash-strapped power utilities unable to afford oil have imposed rolling blackouts. Farmers have run out of fertiliser.
– Chinese debt –
Rating agencies have warned that Sri Lanka might default soon although the government says it will meet its commitments. It is trying to renegotiate its Chinese debts with Beijing.
The import ban has also left car parts in short supply, meaning drivers are at risk of being stranded after a breakdown.
Ravi Ekanayake told AFP that his Colombo repair garage was doing a roaring trade from owners unable to afford the astronomical costs of switching to a new vehicle.
“But parts are scarce. It is a catch-22: You either get caught with an old car without parts or you don’t have the money to buy a new car.”
Financial analyst Murtaza Jafferjee said the prices also underscored a problem caused by excessive money printing by a cash-strapped central bank, with “too much money chasing too few goods”.
He said the prices were also increasing transport costs and adding to inflation, which hit a record 14 percent in December.
“When vehicles become unaffordable for a segment of society, their activities will be limited. Then we will also see a loss of economic output,” the CEO of JB Securities said.
“We are about to collapse and not many people appreciate the depth of the problem.”
Total imports in the third quarter grew to N8,153.79 billion, showing an increase of 17.32% quarter on quarter and 51.47% on a year-on-year basis.
And total exports were pegged at N5,130.30 billion, which shows a 1% growth compared to the second quarter of the same year and a 71.38% growth compared to the third quarter in 2020.
“Export in the third quarter 2021 was still oil-dependent,” the NBS said. “Crude oil exports recorded N4,026.18 billion and it remained the major product in total exports (78.48%), while non-crude oil was valued at N1,104.1 billion or 21.52% of total exports of which Non-oil products only contributed N546.27 billion representing 10.65% of total exports during the quarter under review.”
Nigeria’s major export trading partners, according to the report were India (14.78%), Spain (12.22%), Italy (8.69%), France (7.08%), Netherlands (4.78).
However, the major import trading partners were China (29.95%), India (8.71%), the United States (7.35%), the Netherlands (6.80%) and, Belgium (5.32%).
The Middle East and North Africa are on track to economic recovery, but rising social unrest and unemployment are threatening to hinder “progress”, the International Monetary Fund said Tuesday.
The MENA region, which includes the Arab countries and Iran, saw its real GDP growth shrink by 3.1 percent in 2020 due to lower oil prices and sweeping lockdowns to prevent the spread of the coronavirus.
But with rapid vaccination campaigns, particularly in the Gulf nations, the IMF predicted that GDP growth would rise to 4.1 percent this year, a slight upgrade of 0.1 percent from the last projection in April.
“The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told AFP in an interview.
But “this recovery is not the same in all countries. It is uncertain and uneven because of the divergence in vaccination… and geopolitical developments”, Azour added.
The IMF said this month that while prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries are witnessing “fragile” recoveries.
It warned of “a rise in social unrest” in 2021 that “could pick up further due to repeated infection waves, dire economic conditions, high unemployment and food prices”.
Unemployment rates increased in MENA last year by 1.4 percent to reach 11.6 percent.
This rise exceeds that seen during the global financial crisis and the 2014-15 oil price shock, the IMF said.
The fund also warned of the longer-term risk of the uneven recovery, which could lead to a “permanent widening of existing wealth, income, and social gaps and, ultimately, weaker growth and less inclusive societies”.
About seven million more people in the region are estimated to have entered extreme poverty during 2020-21 compared to pre-crisis projections, according to the IMF.
In Lebanon, the continuing drop in the value of the currency has dashed hopes that the government formed last month can stem an economic crisis, branded by the World Bank as one of the worst since the mid-19th century.
Nearly 80 percent of the Lebanese population lives below the poverty line.
“The Fund has already started technical discussions with the authorities… to develop what would be in fact that the framework within which the fund can help Lebanon,” said Azour, a former Lebanese finance minister.
According to him, there must be synergy between fiscal and monetary authorities to keep the economy on the trajectory of growth.
President Buhari also promised that the government’s Social Investment Programmes (SIPs) would be sustained in the coming years.
He added that they would continue to reach out to the poorest and most vulnerable households through the national cash transfer programme and other initiatives.
As a result, the President revealed that he has directed the Ministry of Humanitarian Affairs, Disaster Management and Social Development to develop a legislative framework for social protection which would also guarantee its funding stream.
Acknowledging the critical role of Micro, Small, and Medium Enterprises (MSMEs) in economic growth and development, he said efforts would be geared towards removing all bottlenecks that obstruct access to government support schemes.
The government, according to President Buhari, will also adopt a holistic approach to industrialisation, in line with Nigeria’s aspirations and requirements while working closing with key stakeholders in the private sector.
Meanwhile, he directed cabinet ministers and permanent secretaries to redouble their efforts and work in synergy toward the total delivery of the government’s set targets to improve the livelihood of all Nigerians.
The President also instructed the ministers to ramp up the implementation of their mandates along the nine priority areas of his administration.
Read President Buhari’s full speech at the event below:
CLOSING REMARKS BY HIS EXCELLENCY, MUHAMMADU BUHARI, PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE END OF THE MID-TERM MINISTERIAL PERFORMANCE REVIEW RETREAT TUESDAY 12TH OCTOBER 2021.
Protocols: After two days of intensive discussions, we have come to the end of a successful Retreat where we reviewed progress on the implementation of the ministerial mandates along the Nine Priority Areas of this administration. 2. The retreat provided an opportunity for us to undertake an objective assessment of our stewardship in line with the contract we signed with the Nigerian people to deliver on our electoral promises. 3. We reflected on what we have done and identified areas where we need to improve and refocus our attention during the remaining period of our Administration. 4. From the assessment report and discussions at this retreat, I am glad to note that progress has been made towards the achievement of our objectives. 5. The independent performance assessment report presented on day one of the retreat, indicates that significant progress has been achieved in the delivery of the Ministerial Mandates. 6. Distinguished participants, the discussions at the retreat have prompted the need for us to ramp up implementation on the deliverables. We must close the gaps in our implementation efforts to ensure that we attain set targets by 2023. 7. To achieve this, the Office of the Secretary to the Government of the Federation is to immediately begin the process of convening quarterly coordination meetings for each priority area based on the collaborative results framework. This is with aim to ascertain status of implementation across the nine priority areas, identify bottlenecks, and proffer immediate solutions. All Ministers and Permanent Secretaries must be in attendance. These are not meetings to delegate. 8. The Office of the Secretary to the Government of the Federation is to immediately commence engagement with stakeholders to agree and push forward a framework for the institutionalisation of the Central Delivery Coordinating Unit. 9. All Ministers and Permanent Secretaries are to promote a robust performance culture across their MDAs by setting up intra-ministerial delivery task teams. 10. The Head of Service should as a matter of urgency invest in capacity strengthening of the Planning, Research and Statistics departments in all MDAs. This should be done in collaboration with the Central Delivery Coordinating Unit. 11. Let me assure Nigerians that this Administration will continue to implement fiscal measures to improve our domestic revenues and mobilise external funding support to build a more resilient economy. There must be synergy between the Fiscal and Monetary authorities to keep the economy on the trajectory of growth. 12. Distinguished Ladies and gentlemen, issues around expanding access to quality education, affordable healthcare and productivity of Nigerians will be given priority attention within the period of this administration. 13. We will sustain all ongoing efforts in rebuilding our health system through targeted investment in the health sector, especially our vaccination drive to halt the spread of the coronavirus pandemic. This administration remains committed to providing the education and training required for employment and entrepreneurship, particularly using technology to impact the relevant skills on our youths. 14. Our Social Investment Programmes will be sustained in the coming years. We will continue to reach out to the poorest and most vulnerable households through the National Cash Transfer Programme and other initiatives of Government. The Ministry of Humanitarian Affairs, Disaster Management and Social Development has been directed to come up with a legislative framework for social protection that also guarantees its funding stream. 15. In view of the critical role of Micro, Small and Medium Enterprises in economic growth and development, efforts will be geared towards removing all bottlenecks that militate against access to government support schemes by SMEs. Government will adopt a holistic approach to industrialisation that is aligned with Nigeria’s aspirations and requirements, working closing with key stakeholders in the private sector. We will continue to support SMEs in view of their multiplier effect on the economy. 16. On the National Single Window Project, the Minister of Finance, Budget and National Planning is directed to ensure all relevant MDAs involved in the implementation of the project complete all processes needed for effective take-off of the National Single Window platform by first quarter of 2022. 17. In our determination to build systems to fight corruption and improve governance, this administration will continue to address the issues that foster corruption and impair transparency in the management of public resources. Efforts will be geared towards improving coordination and synergy between anti-corruption agencies. 18. To improve on our infrastructure development, government will prioritise funding and ensure that all high-priority ongoing infrastructure projects are completed before the end of this Administration. The Presidential Infrastructure Development Fund will continue to support the delivery of our legacy infrastructure projects across the country. 19. Distinguished participants, I am confident that the lessons we have learned in the last two years of implementing our Policies, Programmes and Projects will serve as the needed tool to propel every Ministry to remain committed, towards the achievement of our developmental objectives. I therefore charge all of you to step-up, double your efforts and work in synergy toward total delivery of our Administration’s set target. 20. Finally, I would like to thank Secretary to the Government of the Federation and his team for successfully organising this retreat. 21. I wish to also sincerely thank all of the resource persons that have added immense value to this process. Well done and thank you all. God bless the Federal Republic of Nigeria.
President of the Senate, Ahmad Lawan, has said the President Muhammadu Buhari-led All Progressive Congress (APC) has committed more resources to diversify the economy than any previous administration.
According to Lawan, no past government had invested as much resources, particularly in agriculture as the Buhari government has done.
He made the comments on Saturday at the commissioning of a Poultry Farm Center which the National Agricultural Land Development Authority (NALDA) established in Gasamu, in Jakusko Local Government Area of Yobe State.
“We have promised to diversify the economy of this country. For more than 50 years, our economy had been dependent on one single commodity and that is oil,” the Senate President was quoted as saying in a statement signed on Sunday by his media aide, Ola Awoniyi.
“Oil does not provide so many employment opportunities. There could be revenues but definitely not the mainstream opportunities in terms of employment. But when you diversify into agriculture, you would have much more people engaged, especially our youths who today are largely unemployed or under-employed.
“So, we are diversifying the economy of Nigeria through agriculture, and we have done so much as a country, as a government, in the last six years or so.
“No previous administration in Nigeria has committed as much fund, resources in agriculture than this administration. And I stand to be contradicted, that if not because of resources that we have put in the agriculture sector, Nigeria would still have been importing the food that we eat.
“But everyone knows that the rice import bill had gone so low, almost to nothing today. We used to spend billions of dollars every year to import rice but we have been producing the rice that we eat.
“Of course, we still have to work to stop the smuggling of rice into Nigeria. But I want to assure you that the APC administration at all levels of government, from the local government to the state and federal government, will continue to work for diversification of the Nigerian economy.
“Only last month, the National Bureau of Statistics released the report that our economy has grown by 5.01 percent in GDP. That is to show that we are making progress. We are not yet there but we will be there by the Grace of God and all indications are there that we will be there.”
Lawan thanked Buhari for giving the approval for the farm. This, he said, was in fulfillment of the promise made by the President on behalf of the APC in 2015, to provide employment opportunities for the youths.
“Presently, 30 youths will be engaged to manage the farm.
“This is only the direct employment on this farm. When you look at the indirect opportunities, when you establish poultry farms across this zone, you would have brought in many youths to manage the poultry farms.
“Gasamu, because of this project, is now going to be prominent in the Nigerian map. And this is something that is very important for us as a community here.
“If someone will come from Kano. If someone will come from Imo. If someone will come from Akwa Ibom to buy chicks here, to go and grow them and sell them to make money, why can’t we in this community do the same?
“That means we should be able to have poultry farms coming up across this zone particularly in Jakusko Local Government.
“This is one of the immediate benefits and I will urge our people not to lose the opportunity. I want to seize this opportunity also to appeal to NALDA that we want the capacity to go beyond 250,000 per annum. I want to assure you that our people will exhaust the 250,000 and they will need more,” Lawan said.
The Executive Secretary of NALDA, Hon. Paul Ikonne said the farm center was established on the mandate of President Buhari in order to empower the youths and get the country closer to achieving food security.
“Mr President has directed NALDA to make agriculture attractive for our youths and for NALDA to produce what we are to eat and for Nigerians to eat what we produce.
“So, we are here today for the commissioning of this 30,000-bird capacity which is specially made to produce Noiler (a hybrid of broilers and cockerels).
“This center is like a reproduction centre that will be producing our locally improved birds that will be distributed across the country,” Hon Ikonne said.
He said the farm had the capacity of generating 850 eggs daily and N1.1 million daily from the sales of birds only.
Ikonne said the birds also had an incubator centre in order to produce day-olds that would be used to establish or sent to other poultry houses across the country.
He said the revenue projection for the farm center, with capacity for up to 250,000 birds, would generate not less than N400 million annually.
“NALDA Integrated farm estates are meant to empower the community, to develop the land within the community, empower the youths, create employment and reduce hunger in our land.
“So, communities within the country are expected to donate land. Mr President has directed NALDA to establish Integrated Farm Estates in all the nooks and crannies of Nigeria. So, these lands are developed for the immediate communities and for the empowerment of the communities,” he said.
She further explained that this year’s summit will, again, showcase and promote Kaduna State to domestic and international investors as a major investment destination in Africa including the tourist attractions across the state.
The KADIPA boss also listed some of the benefits recorded by the five previous editions of the investment summit to include improvement in Internally Generated Revenue (IGR), maintaining the position of the state as number one in ease of doing business, gaining active investors, and industrialisation of the state.
According to the organisers, Vice President Professor Yemi Osinbajo, will be the special guest at the summit, which will feature a hybrid event, with attendance being both physical and virtual.